TP-726.20.2-V: Capital gains deduction on resource property

You can use the TP-726.20.2-V form to calculate your capital gains deduction for any capital gains that resulted from the disposition (sale or transfer) of a resource property. Resource properties can include:

• Flow-through shares
• An interest in a partnership that invested in flow-through shares or
• Resource expenses that you paid after May 14, 1992

You can claim this deduction if you meet all of the following conditions:

• You’re a Canadian resident and lived in Canada throughout 2021, part of 2021 and throughout 2020, or you expect to be a resident throughout 2022
• At the end of 2021, the limit on your exploration expenses amount incurred in Québec was positive
• You’re reporting the capital gains no later than one year after the deadline for filing your 2021 tax return

Even if you realized a capital gain on one or more of the resource properties listed above, you can’t claim the capital gains deduction if:

• You acquired your flow-through shares or partnership interest before May 15, 1992 or between June 13, 2003 and March 30, 2004 unless they were issued following the application for a receipt of a final prospectus (or for an exemption from filing a prospectus) made before June 13, 2003.
• If the resource property you disposed of was also a qualified farm or fishing property or small business corporation shares, you can’t claim a capital gains deduction on resource property for that property unless you’ve already used up the capital gains deduction on qualified property.